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Debt Ratio Calculator

LAST UPDATE: August 24th, 2018

Calculator

What is Debt Ratio?

Debt Ratio is ratio of total debt to total assets in a company.

A debt ratio of ‘1’ means that there is the same amount of debt as there are assets.

A debt ratio of more than one means that there is more debt than assets in the firm.

A debt ratio of less than one means that there are more assets than debt in the firm.

Formula

Debt Ratio =  Total Debt / Total Assets

Example

A company has total debt of $5,000 and total assets of $7,000.

Debt ratio = $5,000 / $7,000 = 0.7143

Therefore, this company’s debt ratio is 0.714.

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